CommVault Systems, Inc. (NasdaqGS: CVLT)

CommVault Systems, Inc. is a provider of data and information management software applications and related services. The company develops, markets and sells a suite of software applications and services, primarily in North America, Europe, Australia and Asia, which provides its customers with data protection; data migration and archiving; snapshot management and replication of data; integrated source and target reduplication; e-discovery and compliance solutions; protection, recovery and discovery of data in virtual server environments; enterprise-wide search capabilities, and management and operational reports, remote services and troubleshooting tools. The company also provides its customers with a range of professional and customer support services. CommVault develops, markets and sells data and information management software applications under the Simpana brand.

To review CommVault's stock, please take a look at the 1-year chart of FL (CommVault System, Inc.) below with my added notations:

After breaking to a new high in February, CVLT has been consolidating within a sideways, Rectangle pattern over the last (4) months. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. For CVLT, the Rectangle pattern has formed a $55 resistance (red) and a $50 support area (black). Last week the stock broke its $50 support and should be moving lower overall from here.

The Tale of the Tape: CVLT formed a Rectangle pattern and broke that pattern's support. A short position should be entered on a rally back up to $50 with a stop placed above $50. A break back above $50 would negate the forecast for a move lower.